Bill Text: OR SB74 | 2013 | Regular Session | Introduced
Bill Title: Relating to insurance.
Sponsorship: Committee Bill
Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB74 Detail]
Download: Oregon-2013-SB74-Introduced.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 923
Senate Bill 74
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Judiciary)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Changes calculation of present value of adjusted premiums for
certain types of life insurance so that present value of all
adjusted premiums equals 50 percent of adjusted premium for first
policy year instead of 40 percent of adjusted premium for first
policy year.
A BILL FOR AN ACT
Relating to insurance; amending ORS 743.216.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 743.216 is amended to read:
743.216. This section applies only to life insurance policies
issued before the operative date { - defined - } { +
specified + } in ORS 743.215. For such policies:
(1) Except as provided in subsection (3) of this section, the
adjusted premiums referred to in ORS 743.210 { - shall - }
{ + must + } be calculated on an annual basis and
{ - shall - } { + must + } be { - such - } { + a + }
uniform percentage of the respective premiums specified in the
policy for each policy year, excluding any extra premiums charged
because of impairments or special hazards, { + such + } that the
present value, at the date of issue of the policy, of all such
adjusted premiums
{ - shall be equal to - } { + equals + } the sum of:
(a) The present value at the policy issue date of the future
guaranteed benefits { - provided for by - } the policy { +
provides + }.
(b) Two percent of the amount of insurance if the insurance is
uniform in amount, or of the equivalent uniform amount as defined
in subsection (2) of this section if the amount of insurance
varies with duration of the policy.
(c) { - Forty - } { + Fifty + } percent of the adjusted
premium for the first policy year. For this purpose, any excess
of the adjusted premium over four percent of the amount of
insurance or equivalent uniform amount { - shall - } { +
must + } be disregarded.
(d) Twenty-five percent of either the adjusted premium for the
first policy year or the adjusted premium for a whole life policy
for the same uniform or the same equivalent uniform amount of
insurance with uniform premiums for the whole of life issued at
the same age, whichever is less. For this purpose, any excess of
the adjusted premium over four percent of the amount of insurance
or equivalent uniform amount { - shall - } { + must + } be
disregarded.
(2) In the case of a policy { - providing - } { + that
provides + } an amount of insurance { - varying - } { + that
varies + } with duration of the policy, the equivalent uniform
amount of the subject policy for the purpose of this section
{ - shall be - } { + is + } the uniform amount of insurance
provided by an otherwise similar policy, containing the same
endowment benefit or benefits, if any, issued at the same age and
for the same term, the amount of which does not vary with
duration and the benefits under which have the same present value
at the date of issue as the benefits under the subject policy.
However, in the case of a policy { - providing - } { + that
provides + } a varying amount of insurance issued on the life of
a child under age 10, the equivalent uniform amount may be
computed as though the amount of insurance provided by the
subject policy { - prior to the attainment of - } { + before
the child attains + } age 10 { - were - } { + was + } the
amount { - provided by - } the subject policy { +
provided + } at age 10.
(3) The adjusted premiums for any policy providing term
insurance benefits by rider or supplemental policy provision
{ - shall - } { + must + } be calculated in accordance with
this subsection. The amounts specified in paragraphs (a) and (b)
of this subsection
{ - shall - } { + must + } be calculated separately. Each
such amount { - shall - } { + must + } be calculated as
specified in subsections (1) and (2) of this section. However,
for the purposes of subsection (1)(b), (c) and (d) of this
section, the amount of insurance or equivalent uniform amount of
insurance used in the calculation of the adjusted premiums
referred to in paragraph (b) of this subsection { - shall - }
{ + must + } be equal to the excess of the uniform or
equivalent uniform amount determined for the entire policy over
the amount used in the calculation of the adjusted premiums in
paragraph (a) of this subsection. The adjusted premiums for the
entire policy { - shall - } { + must + } equal the sum of:
(a) The adjusted premiums for an otherwise similar policy
issued at the same age without such term insurance benefits; and
(b) During the period for which premiums for such term
insurance benefits are payable, the adjusted premiums for such
term insurance benefits.
(4) { + (a) + } Except as provided in paragraphs { - (a) and
(b) - } { + (b) and (c) + } of this subsection and subsection
(5) of this section, all adjusted premiums and present values
referred to in the Standard Nonforfeiture Law for Life
Insurance { + , + } { - shall - } for all policies of ordinary
life insurance to which this section applies { + , must + } be
calculated on the basis of the Commissioners 1941 Standard
Ordinary Mortality Table. Such calculations for any category of
ordinary life insurance issued on female lives may, however, be
based on an age not more than six years younger than the actual
age of the insured. Except as provided in paragraphs { - (a)
and (b) - } { + (b) and (c) + } of this subsection and
subsection (7) of this section, such calculations of adjusted
premiums and present values for all policies of industrial life
insurance { - shall - } { + must + } be made on the basis of
the 1941 Standard Industrial Mortality Table. All calculations
{ - shall - } { + must + } be made on the basis of the rate of
interest, not exceeding three and one-half percent per annum,
specified in the policy for calculating cash surrender values and
paid-up nonforfeiture benefits. { - The following exceptions
pertain: - }
{ - (a) - } { + (b) + } In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if
any, offered as a nonforfeiture benefit, the rates of mortality
assumed may be not more than 130 percent of the rates of
mortality according to the respective table.
{ - (b) - } { + (c) + } For insurance issued on a
substandard basis, the calculation of adjusted premiums and
present values may be based on such other table of mortality as
may be specified by the insurer and approved by the Director of
the Department of Consumer and Business Services.
(5) { + (a) + } This subsection applies only to policies of
ordinary life insurance to which this section applies and
{ - which - } { + that + } are issued on or after the
operative date of this subsection as defined in subsection (6) of
this section. For such policies, all adjusted premiums and
present values referred to in the Standard Nonforfeiture Law for
Life Insurance { - shall - } { + must + }, except as provided
in paragraphs { - (a) and (b) - } { + (b) and (c) + } of this
subsection, be calculated on the basis of the Commissioners 1958
Standard Ordinary Mortality Table and the rate of interest
specified in the policy for calculating cash surrender values and
paid-up nonforfeiture benefits. Such calculations for any
category of ordinary life insurance issued on female lives may,
however, be based on an age not more than six years younger than
the actual age of the insured. Such rate of interest
{ - shall - } { + may + } not exceed three and one-half
percent, except that a rate of interest not exceeding four
percent may be used for policies issued from January 1, 1974, to
December 31, 1977, and a rate of interest not exceeding five and
one-half percent may be used for policies issued on or after
January 1, 1978, and with the further exception that for any
single premium whole life or endowment insurance policy a rate of
interest not exceeding six and one-half percent may be used.
{ - The following exceptions pertain: - }
{ - (a) - } { + (b) + } In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if
any, offered as a nonforfeiture benefit, the rates of mortality
assumed may be not more than those shown in the Commissioners
1958 Extended Term Insurance Table.
{ - (b) - } { + (c) + } For insurance issued on a
substandard basis, the calculation of adjusted premiums and
present values may be based on such other table of mortality as
may be specified by the insurer and approved by the director.
(6) After August 9, 1961, any insurer may file with the
director a written notice of { - its - } { + the
insurer's + } election to comply with { - the provisions of - }
subsection (5) of this section after a specified date before
January 1, 1966. After the filing of
{ - such - } { + the + } notice, { - such - } { + the + }
specified date { - shall be - } { + is + } the operative date
of subsection (5) of this section for the insurer with respect to
the ordinary life policies { - it thereafter - } { + the
insurer + } issues { + after the specified date + }. If an
insurer { - makes no such election, such - } { + does not
elect to comply with subsection (5) of this section, the + }
operative date for the insurer { - shall be - } { + is + }
January 1, 1966.
(7) { + (a) + } This subsection applies only to policies of
industrial life insurance to which this section applies and which
are issued on or after the operative date of this subsection as
defined in subsection (8) of this section. For such policies, all
adjusted premiums and present values referred to in the Standard
Nonforfeiture Law for Life Insurance { - shall - } { +
must + }, except as provided in paragraphs { - (a) and (b) - }
{ + (b) and (c) + } of this subsection, be calculated on the
basis of the Commissioners 1961 Standard Industrial Mortality
Table and the rate of interest specified in the policy for
calculating cash surrender values and paid-up nonforfeiture
benefits. Such rate of interest { - shall - } { + may + } not
exceed three and one-half percent, except that a rate of interest
not exceeding four percent may be used for policies issued from
January 1, 1974, to December 31, 1977, and a rate of interest not
exceeding five and one-half percent may be used for policies
issued on or after January 1, 1978, and with the further
exception that for any single premium whole life or endowment
insurance policy a rate of interest not exceeding six and
one-half percent may be used. { - The following exceptions
pertain: - }
{ - (a) - } { + (b) + } In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if
any, offered as a nonforfeiture benefit, the rates of mortality
assumed may be not more than those shown in the Commissioners
1961 Industrial Extended Term Insurance Table.
{ - (b) - } { + (c) + } For insurance issued on a
substandard basis, the calculation of adjusted premiums and
present values may be based on such other table of mortality as
may be specified by the insurer and approved by the director.
(8) After September 2, 1963, any insurer may file with the
director a written notice of { - its - } { + the
insurer's + } election to comply with { - the provisions of - }
subsection (7) of this section after a specified date before
January 1, 1968. After the filing of
{ - such - } { + the + } notice, { - such - } { + the + }
specified date { - shall be - } { + is + } the operative date
of subsection (7) of this section for the insurer with respect to
the industrial life insurance policies { - it thereafter - }
{ + the insurer + } issues { + after the specified date + }.
If an insurer { - makes no such election, such - } { + does
not elect to comply with subsection (7) of this section, the + }
operative date for the insurer { - shall be - } { + is + }
January 1, 1968.
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